'Privatising Eskom would be a mistake'

Public Enterprises Minister Lynne Brown says the focus should be on ensuring SA has enough electricity.

FILE: Brown says Eskom is a critical part of government’s agenda and it would be a mistake to privatise it.

JOHANNESBURG - Public Enterprises Minister Lynne Brown says the debate about privatising Eskom is misguided and the focus should be on making sure the country has enough electricity.

Brown's comments follow reports that cabinet is considering selling some Eskom power stations in a bid to raise cash as the utility battles to build new generation capacity.

Brown says Eskom is a critical part of government's agenda and it would be a mistake to privatise it.

The National Union of Metalworkers South Africa (Numsa) General Secretary Irvin Jim who represents Eskom workers says Brown is right, that the country wouldn't benefit.

"They will make money out of this national asset and we take no time as we know capital doesn't get involved if it's not going to maximise profit."

But the Free Market Foundation's Leon Louw says Eskom should be privatised.

"And everyone opposed to it is simply in favour of perpetuating one of the worst Apartheid dinosaurs, what used to be called a strategic industry."

Brown says there's no need to raise temperatures on this issue.

Last week, Brown said the selling of assets, possible tariff hikes and private sector equity were all options that had to be considered in any serious discussion about the power utility's future.

But the Congress of South African Trade Unions is likely to fight any privatisation of Eskom.

Energy expert Chris Yelland says Eskom needs more money to build new power stations.

"We can't raise the money through the tariff anymore. The regulator has passed through R7.8 billion."

Also last week, the National Energy Regulator of South Africa said it will draft an implementation plan that will determine exactly how Eskom will recover almost R8 billion in losses from consumers.

The energy regulator granted Eskom permission to adjust rates next year above the eight percent increase already granted.

Eskom has not confirmed the exact percentage increase.

Meanwhile, the Cape Chamber Of Commerce and Industry said it feared further electricity price hikes would hamper business growth.